1. Payment Models and Provider Collaboration SYNC: Transforming Healthcare Leadership September 16, 2016

2. Agenda Overview of Payment Model and Structure
Mandatory Programs Across the Continuum
Voluntary Programs

3. Overview of Payment Model Structure

4. HHS Goals
January 2015, directional goals set for advancing payment reform.
2016
2018
Value Based Payments
85%
Goal #1
30% of Medicare payments tied to quality or value through alternative payment models by end of 2016
ACO, medical homes, bundled payments, comprehensive primary care initiatives, pioneer ACOs
50% by the end of 2018
Goal #2
85% of all Medicare FFS tied to quality or value
Same as goal #1 + hospital value-based purchasing, physician value based modifier, readmission/hospital acquired conditions reduction program by the end of 2016
90% by the end of 2018
Alternative Payment

5. HCPLAN Framework: January 2016
Source: Alternative Payment Model Framework and Progress Tracking Workgroup, “Alternative Payment Model (APM) Framework”, HCP-LAN. 12 Jan Web. 31 Jan 2016.

6. Where Are We Going?
Source: Alternative Payment Model Framework and Progress Tracking Workgroup, “Alternative Payment Model (APM) Framework”, HCP-LAN. 12 Jan Web. 31 Jan 2016.

7. CMMI Programs

8. Value Based Purchasing
Continuum Emphasis
Value Modifier/MIPS
Acute
Ambulatory
Post Acute
Accountable Care
Organizations
Bundled Payments/
EPMs
Comprehensive
Primary Care (+)
Readmission Penalty
Value Based Purchasing
(Hospital, HH, SNF)

9. Transparency Focus Physician Compare Star Ratings Patient empowerment
State efforts

10. Mandatory Programs Across the Continuum

11. Mandatory Payment Reform is Everywhere
VBP
RRP
HAC
CJR
Cardiac Bundles*
PQRS/VM MU
MIPS/APM
SNF VBP
HH VBP
* These are in proposed form at this time.

12. Acute: VBP/RRP/HAC
Base of $100,000,000 of Medicare Part A Revenue

13. Performance Periods

14. MACRA Known as the “SGR Fix” Created the Quality Payment Program
Choice of two paths for each physician practice: APM vs MIPS
Most physicians in MIPS path by default
Proposed rules have program starting in 2019 with performance period effective 1/1/17
Recently offered flexibility in timing of implementation

15. What is MIPS?
Source:

16. Neither MIPS Path APM Path
Decision Tree for QPP
Neither
Am I in an APM?
Do I meet minimum criteria? No No
Yes
Yes
Is it an Advanced APM?
MIPS Path No
Yes
Do I meet the volume or revenue criteria?
No (Option of Partial Qualifying, if not, then MIPS Path)
Yes
APM Path

17. MIPS Optimization
A sample practice with $25M in Medicare fee schedule payments
Does not include the adjustment factor of up to 3X per year

18. Significant Strategic Implications
What should you be doing now by type of entity?
How are you performing now on QRUR?
How prepared are affiliation as well as employed practices?
What are your market dynamics?
How does this tie to system wide initiatives?

19. Skilled Nursing VBP
To start in 2019 with 2% of Medicare reimbursement at risk
2014 SGR fix used part of the 2% to pay for the fix so facilities can’t earn it all back
Key metrics are readmissions
Published on nursinghomecompare

20. Home Health VBP 5 year pilot in 9 states: Virginia is not one of them
4 domains with shifting metrics
At risk reimbursement starts at 4% and goes to 9% in 5 years

21. Voluntary Programs

22. ACOs Currently 434 Medicare Shared Savings Programs
Other Medicare ACOs: Pioneer ACO, ACO Investment Model, Next Generation ACO
Modifications continue to the models
Annual classes of ACOs

23. Financials: MSSP Track 2
Assumes no changes in target or risk adjustments for simplicity

24. Let’s Do The Math Year 1 Year 2 Year 3
Did the spend exceed the MSR or MLR?
Yes No
How much savings/loss
$3,772,000
($3,100,000)
What is the quality score?
100%
90%
What is the share rate?
60%
1-(60%*90%)=.46
Total savings/loss shared
$2,263,200
($1,426,000)

25. Bundled Payments
Prometheus (Provider payment Reform for Outcomes, Margins, Evidence, Transparency, Hassle Reduction, Excellence, Understandability and Sustainability): 21 bundles
State Medicaid Programs:
Initiated as part of reform efforts: Arkansas, Ohio, Tennessee, and more under planning stages.
Commercial Programs
Largely cardiac and orthopedic in nature and not pervasive geographically
Medicare Programs:
Bundled Payment for Care Improvement (BPCI): 48 bundles
Comprehensive Care for Joint Replacements (CJR): 1 mandated bundle

26. Medicare Bundles (finalized)
Bundled Payment for Care Improvement (BPCI)
Comprehensive Care for Joint Replacement (CJR)
# of Providers Participating
Over 1500: Across providers
789 Hospitals
Voluntary/Mandatory
Voluntary
Mandatory
Diagnoses Covered
Up to 48 Choices of Episodes: Currently over 14,000 live
Single Episode: Hips/Knees
Time Frame
3 years with extension
5 years
Price Determination
Historical Spending
Blend: Historical and Regional
What’s next?
On July 25, 2016 CMS issued proposed rules for two cardiac bundles and an expansion of the CJR bundle. This is proposed to start on July 1, 2017.

27. Let’s Do the Math
What if the target price is $25,000 for Episode 1 and $30,000 for Episode 2?

28. New Cardiac & Expanded CJR Bundles/EPMs
New Acronym: Episode Payment Model= EPM
Proposed Rules issued July 25, 2016 with comment period open for 60 days.
Cardiac: AMI (DRGs and PCI DRGs ) & CABG (DRGs
Orthopedic: SHFFT: Surgical hip/femur fracture treatment excluding LEJR (DRGs )
90 day episodes and 5 year program with first performance year truncated starting 7/1/17 through 12/31/17

29. EPMs continued…
No downside risk the first performance year (7/1/17-12/31/17)
Downside risk starts in the 2Q in the second performance year
Settlement is retrospective and performed annually
Discounts determined similarly to CJR starting at 3% for unacceptable and acceptable quality down to 2% and 1.5% for good and excellent ratings respectively
Quality metrics and weights:
AMI
CABG
SHFFT
Mort-30
50%
75%
Excess Days
20%
HCAHPS
25%
40%
Complications
Voluntary
10%

30. EPMs Continued… Who is mandated for these EPMs?
SHFFT: to expand in the 67 MSAs for CJR
AMI and CABG: will be mandated 98 in MSAs out of 294 eligible MSAs (total n= 384)
Hospitals are the episode initiators (at risk)
3 years historical information like BPCI and CJR
Pricing will phase to regional like CJR:
Regions= 9 US Census Divisions

31. Specialty Models Oncology Care Model 6 month episode
Oncology practice based
Part A,B and some D
21 participants: April 2016
2nd class planned
Shared savings model with target prices based on historical spend by type of cancer
Comprehensive ESRD Care Model
Annual spend
Two types: large dialysis and non large dialysis organizations
2nd class applications due 7/15/16
Shared savings model based on 3 year historical spend

32. Independence At Home
Objective is to test effectiveness of delivering comprehensive primary care services at home specifically to patients with multiple chronic conditions
Currently 14 sites involved for 3 year program
Tracked spending and quality measures
2nd year results announced 8/9/16

33. Year 2 Results 6 of the Practices Year 2 Target Year 2 Expenditures
Incentive Payment
Boston Medical Center
$4,148
$4,236 $-
Christiana Care Health System
$3,911
$4,450
Cleveland Clinic Home Care
$3,619
$3,565
Housecall Providers
$3,233
$2,393
$1,107,295
Mid Atlantic Consortium
$4,076
$3,576
$866,865
Northwell HealthCare
$3,276
$2,708
$874,151
All sites improved quality from first performance year.
An average of $1,010 per beneficiary for the 10,484 beneficiaries was saved.

34. Post Acute Networks
Formalizing preferred providers by post acute provider type
Hold preferred providers accountable based on quality metrics/outcomes
Share data on routine basis
Partner on streamlined protocols
Gain share or put dollars at risk